By Takashi Mochizuki and Megumi Fujikawa 

TOKYO--Canon Inc. said Tuesday that it plans to fully acquire Swedish network video solutions provider Axis AB for around Yen333.7 billion ($2.8 billion), in a search for new growth outside its struggling traditional businesses.

The Japanese optics giant said it would make a tender offer for the Stockholm-listed Axis's shares as soon as its bid was approved by the Swedish Financial Supervisory Authority and Nasdaq Stockholm.

Canon faces slowing growth in its core businesses--cameras and office equipment. Its operating profit rose 7.8% and net profit increased 10.5% in 2014, but the gains were mostly the result of a sharply weaker yen, which fell 8% against the U.S. dollar and euro last year.

Sales volume at the office-equipment unit dropped 20.7% and tumbled 32.8% at the camera arm. According to research firm Euromonitor, the global digital camera market is expected to have shrunk by 20% in 2018 from a peak in 2010.

"The acquisition is a good and important step for Canon and its investors because we have all been wondering where it will seek the next growth source. Its traditional turf is increasingly slowing," said Mari Yada, a research analyst at Aizawa Securities.

Axis is the global leader in network security cameras. Industry analysts expect rapid growth in the industry and many global giants such as Sony Corp. are getting in. It captured 17.5% of the global market in 2013, followed by Hikvision Digital Technology Co.'s 13% and Panasonic Corp.'s 9.1%, according to IHS Technology. Canon also offers security video networks but wasn't ranked in the top 10.

Canon and Axis developed network cameras together in 2002, selling products from each brand.

Axis will remained based in Lund, Sweden, and keep its current management team, workforce of 1,900 employees, and brand names, both companies said.

Axis said in a statement that the board of directors would unanimously recommend that shareholders accept the offer.

Analysts said they welcomed the move from the perspective of Canon, which sits on a large pile of cash. The price, which represents a 49.8% premium on Axis's share price as of Monday, would have to be evaluated in the longer term, they said.

"Canon has high reputation for its hardware but it didn't have much experience in surveillance security systems so buying the lacking part was a good move," said Tetsuya Wadaki, a managing director of Nomura Securities. "But the premium on the deal is very high, so it must prove down the road that it can properly manage the foreign company--say, raise its market share further to secure the global top position."

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com and Megumi Fujikawa at megumi.fujikawa@wsj.com

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